SG Bike to buy Mobike’s Singapore licence for $1.85m

A Beijing Mobike Technology Co., hire bicycle sits parked at a sidewalk in Singapore, on Thursday, April 26, 2018. Photographer: Paul Miller/Bloomberg

Singapore-based bike-sharing startup SG Bike has inked a $1.85-million (S$2.54 million) deal to acquire Chinese startup Mobike’s license to operate 25,000 shared bikes in the city-state, according to a stock exchange disclosure last week.

The SGX announcement was made by Singapore-based urban planning and civil engineering company ISOTeam, which owns 51 per cent of SG Bike.

The deal is subject to regulatory approval. If successful, it will effectively make SG Bike the largest shared bike operator in the city. Singapore’s Land Transport Authority (LTA) is expected to let users unlock Mobike bicycles via SG Bike’s app by September 13.

Sean Tay, Chief Operating Officer of SG Bike, said: “With the increased bicycle fleet size, SG Bike will now be able to serve more areas in Singapore. Bicycles will also be strategically deployed to ensure bicycle availability.”

SG Bike added that it will be rolling out more campaigns and promotions in the near future.

According to the statement, the transaction includes the purchase of Mobike’s licence to operate its bicycles in Singapore, a security deposit of $550,000, and 25,000 bicycles, as well as related bicycle service fees for storage costs.

Singapore’s LTA has been clamping down on e-scooter and bike-sharing operators citing the irresponsible use of these personal mobility devices (PMDs) on public streets. In recent months, the LTA has introduced sandbox licenses limiting the number of PMDs allowed in the city. Apart from Mobike and SGBike, the other approved bike-sharing firms in the city today are Anywheel and Moov Mobility.

Mobike first launched its bike-sharing service in Singapore in March 2017. The Chinese startup, which was acquired by Meituan Dianping for $3.4 billion, has been announcing plans to roll back its international operations.

In March, Meituan CEO Wang Xing told analysts on an earnings call that the firm will focus on its core food delivery business in 2019 and seek to reduce losses caused by other businesses such as bike-sharing. Company executives confirmed an overseas restructuring plan for Mobike was underway that included “the sale or abandonment of the selected entities in 2019.”

Other bike-sharing operators like China’s Ofo and Singapore’s oBike have experienced similar troubles. Both companies ceased their operations in the city-state last year.